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Does foreign environmental policy influence domestic innovation ? Evidence from the wind industry

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  • Antoine Dechezleprêtre

    ()
    (CERNA - Centre d'économie industrielle - Mines ParisTech, Grantham Research Institute on Climate Change and the Environment - London School of Economics and Political Science)

  • Matthieu Glachant

    (CERNA - Centre d'économie industrielle - Mines ParisTech)

Abstract

This paper examines the relative influence of domestic and foreign renewable energy policies on innovation activity in wind power using patent data from OECD countries from 1994 to 2005. We distinguish between the impact of demand-pull policies (e.g., guaranteed tariffs, investment and production tax credits), as reflected by wind power capacities installed annually, and technology-push policies (government support to R&D). We show that inventors respond to both domestic and foreign new capacities by increasing their innovation effort. However, the effect on innovation of the marginal wind turbine installed at home is 28 times stronger than that of the foreign marginal wind turbine. Unlike demandpull policies, public R&D expenditures only affect domestic inventors. A simple calculation suggests that the marginal million dollars spent on R&D support generates 0.82 new inventions, whereas the same amount spent on the deployment of wind turbines induces, at best, 0.06 new inventions (0.03 locally and 0.03 abroad).

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number hal-00574108.

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Date of creation: 2011
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Handle: RePEc:hal:journl:hal-00574108

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Keywords: innovation; public R&D; renewable energy policies; wind power;

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  1. Antoine Dechezlepretre & Matthieu Glachant & Ivan Hascic & Nick Johnstone & Yann Meniere, 2010. "Invention and transfer of climate change mitigation technologies on a global scale: a study drawing on patent data," LSE Research Online Documents on Economics 37590, London School of Economics and Political Science, LSE Library.
  2. Stavins, Robert & Jaffe, Adam & Newell, Richard, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," Discussion Papers dp-98-12-rev, Resources For the Future.
  3. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-32, December.
  4. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
  5. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
  6. Antoine Dechezleprêtre & Matthieu Glachant & Ivan Hascic & Nick Johnstone & Yann Ménière, 2011. "Invention and transfer of climate change-mitigation technologies: A global analysis," Post-Print hal-00488214, HAL.
  7. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
  8. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
  9. Antoine Dechezlepretre & Matthieu Glachant & Yann Meniere, 2009. "What drives the international transfer of climate change mitigation technologies?: empirical evidence from patent data," LSE Research Online Documents on Economics 37617, London School of Economics and Political Science, LSE Library.
  10. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
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  12. Nemet, Gregory F., 2009. "Demand-pull, technology-push, and government-led incentives for non-incremental technical change," Research Policy, Elsevier, vol. 38(5), pages 700-709, June.
  13. Popp, David, 2006. "International innovation and diffusion of air pollution control technologies: the effects of NOX and SO2 regulation in the US, Japan, and Germany," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 46-71, January.
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  15. Joseph M. Crabb & Daniel K.N. Johnson, 2010. "Fueling Innovation: The Impact of Oil Prices and CAFE Standards on Energy-Efficient Automotive Technology," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 199-216.
  16. Karsten Neuhoff, 2005. "Large-Scale Deployment of Renewables for Electricity Generation," Oxford Review of Economic Policy, Oxford University Press, vol. 21(1), pages 88-110, Spring.
  17. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
  18. David Popp & Tamara Hafner & Nick Johnstone, 2007. "Policy vs. Consumer Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry," NBER Working Papers 13439, National Bureau of Economic Research, Inc.
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  20. Park, Walter G., 2008. "International patent protection: 1960-2005," Research Policy, Elsevier, vol. 37(4), pages 761-766, May.
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Citations

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Cited by:
  1. Antoine Dechezleprêtre & Richard Perkins & Eric Neumayer, 2012. "Regulatory distance and the transfer of new environmentally sound technologies: evidence from the automobile sector," Grantham Research Institute on Climate Change and the Environment Working Papers 73, Grantham Research Institute on Climate Change and the Environment.
  2. Rob Aalbers & Victoria Shestalova & Viktoria Kocsis, 2012. "Innovation policy for directing technical change in the power sector," CPB Discussion Paper 223, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Dutz, Mark A. & Sharma, Siddharth, 2012. "Green growth, technology and innovation," Policy Research Working Paper Series 5932, The World Bank.
  4. Peters, Michael & Schneider, Malte & Griesshaber, Tobias & Hoffmann, Volker H., 2012. "The impact of technology-push and demand-pull policies on technical change – Does the locus of policies matter?," Research Policy, Elsevier, vol. 41(8), pages 1296-1308.

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